Seattle daily post-intelligencer. [volume] (Seattle, W.T. [Wash.]) 1881-1888, 1887-05-06
PlCIPIC RIILROiDS.
Investigation or the Union
Pacific by the New
Commission.
The Consolidation Matter
the Chief Point Of
Discussion.
Pennsylvania Visited By q
Thurder Storm Equal
TO a Hurricane.
ORer Of the caaadian Paelne-c Canadian
Interstate Commerce -Behring Sea
Qaestica - Paciae Steamship
sabsidy-Mesting Of
B0adhalders.


Faetae Railroad EasestiGasIea.
NEw YcRx, May 5.-Tha exanination
Of Special Counsel AFtemua III. Holmes,
Of the Union Paciie Rsllraad Campany,
vas continned before Commissioners
Pattison, Anderson, and LiftleF today.
Mr.. Anderson held In his hand fhe
Judgment roll in the matter Of the
bearing before Referee Raggies. On
application TO have the Denver Paciic
stock leased a. @ security for the mort
CAGES on she Kansas Pacific, Of which
the witness related the story yesterday.
Anderson asked il tke witness knew Who
erNaed the answer 10 this Questieu:
what were the mes earnings of the
Kansas Pacific last year77 Original
answer wBs mot much Of anything
and over which erasure vas written
about half million dollars.n Mr.
HOLMES knew nothing about this, but
the substituted answer vas probably
the correct one. Mr.. Helmes thought
that Judge Dillon drew 40 she articles
Of consolidation Of the Kansas Pacific,
and the Unien Pacific, and that if was
prtsr 20 the time when the g, $50 shares
Of the Denver Pacific stock passed from
ths ownership of the K4msas Pacific to
the hands OF the Union Pacific party.
MessEs. Jay Goa!d, Rassell Sage and
others.
Ihs Recorder states that Mr.. GaaId
held, aud voted On 1874 shares; Mr.
Ames, 40S5; Sidney Dillon, 8, l13; Henry
Willard not any nor Mr.. Holmes. Rms
sell sage lad s977 shares and these
constitute the Union Paeifis party
k.a oh aah
shares were represented in the agree
ment. These men wers all directors of
the Unien Pacific. MIR. Holmes did
not know how mHch profit there was IN
Ihs ponl, but thought Dot so much ss
$0.0O0.000.
Commissioner Psttison asked who got
poss ssion of the go, eco 600 of the Kan.
sss Pacific and the $4,000, 900 Of the
Denver Pacific stock. bat MIR. Holmes
said he thought they simply drifted
back to their original owners. Under
che consolidation Gould or any ether
holder of Kansas Pacific stock ex-
changed two OF their $50 shares for 0ne
800 share of Union Pacific stock. thsir
values being about the same IN the mar
ket at that time. The relative status of
securities was fixed by the arbitration
Of all the leading parties at trihe
greater than their market quotation as
an inducement to holders to put them
into the poel as good investment" ex
planned Holmes. The schedule at which
The various securities were admitted to
the pool was as follows: Stock, t211S per
cent; hoaIing dsbi, 30 per cent: IN
subordinated income bonds. 30 per
cent; subordinated income bonds, 30
per rent, and second land grant bonds,
SO peElcent.
"fs il not true" asked Anderson.
that jay Gould, Sidney Dillon, Russell
Sage, Frederick Ames and others you
have named obtained credit by means
Of the pool for large amounts of Kansas
Pacfio stock in saboFdina ed bonds,
uusubordiuated bonds, second land
grant bonds, Leaven~orth Pacifis
stock, etc."
Holmes replied: "Yes, In exchange
for other securities" Holmes then
made a statement that the Union PAci.
fie profted by the consolidation in shat
il got the benefit Of all the haRdlinR and
thereby stopped the competition OF the
Kansas Pacific. Jay Gould thus con.
troiled the dangerous weapon of hos
tile rival. II the c0nselidstioa had not
been made the Kansas Pacific woul1
not have been worth ten cents on the
dollar and Denver Pacific stock would
net have been worth more than lie
value AZ waste paper.
To General Pattissa Hslmes said be
did not think The effect vas 20 lozd
Union Pacific With two valHelesa roads.
because the Kansas Pacific had been q
eosd paying road ever since. IL was
true the Denver stock was worth g. co.,
COO the next dag by the eonsummstion
Of the consolidation.
Altar Yesess Judge 3. r. Dillon,
nephew Of Sydney Dillon, who became
an attorney for the Uuion Pacific In
1877, was the witness. He thought that
be prepared the articles Of consolidation
II ihe roads under Instructions Be-
yoRd this fact nothing Of Interest was
sliaitad IN his testimony.
Gov. Pattisoa read from the aet 40
pointing the Commission the clause
xhich lays down the objects Of the iH-
vesiigation, Including sn IBqaiFy into
he validity Of The alleged ooasolida-
ton OF the Pacific roads. He asked
Judge Dillon for his opinion on that
/ point.
Judge Dillon replied that be bad with
him the original opinions OF counsel A
ts the power Of the con solidated con-
panies to issue SO Coz. 900 collateral
/ trust bonds signed BY John L. Dillon,
sidney Bartlett and Artsmus h. H0lmes
| dated IN OctebeF, 1852. Sidney DilloH
transmitted this opinion to the Board
Of Direetsrs on November 5ah follow.
ing. Ne potioe vas given 10 the Gov
| sFnnent OF tte proposed me. ginR FL
the Union P&ci3s wsth the oshef roads
bat Il was BiIlon's Fecolit ction that ID.
/ Government Directors were present a,
| the meeting witch eausnmuatsd The
consolidation and that they voted IL
savoE sf Judge Dtilon's oPiEion.
Regarding the present status Of ths
Government Directors 10 the res CON
vany asked by Governor Pattisoa. be re
pied that The matter wAs %; over fol
seton at the 1txt annasl neetiag Of tht
Board. In ths meantime tue Opinion
Of Attsgney General Dsvins vas ab-
fained BY the Governments Directors q
the eject that no eonsslid ztfsn eeuls
be made Which w0asd SHUT cot tbs CIV
eminent D1fectsrs, and IL has teen esn
sideFed si1se that they bid the ofteina
powers ss far - tbs nd UDion Pscia
road was concerned.
Sidney Dillon Vas called TO the stan
nexI he said thai be hsd foFpottei
when his oonneotloD wsth the Uniol
Paaife began. he tsleersbted 30 Bos
ton and ie answer lesFhed that work be
gan on the Enalu lsne Ia iess3. he wA
selected Gs Director IN i-tS snd a
Pr<ssaent IN 1874 Whsn consolidation
was talked Of tie witness sxsminei
inso IL eaFefully and eoaia not tell whe
this connection wIfa tie Kansas Psel6
began he could nat FssAli the q dste
as ali. be believed thss he was sieese
President abosi tie time q the consol
idAtion. bal be eoaid net rscslsecs. II
VS. Direct3r pFsvlozsly.
The attorney f0r the wit0ess rep ie
at tcis psins, yes, for ss0Ft tune"
Mr. H&aim. DlliSu's secretary, a
eiose sshiHd and uas App@sied 20 fF,
q1ezssy.
rnsoa testified in geeardsEes wis
hSa secretary q peom psiug And kp1sneix